DR.

RAM MANOHAR LOHIYA NATIONAL LAW

UNIVERSITY, LUCKNOW (U.P.)

Session- 2016-17

PROPERTY LAW :FINAL DRAFT

Right To Alienation Of Property By The Act Of Party

SUBMITTED TO:

SUBMITTED BY:

Dr. Radheshyam Prasad

Trivendra Kumar Singh

Assistant Professor

Roll no. -152

Department of Law

Section - B

Semester- V

ACKNOWLEDGEMENT

I am feeling highly elated to work on the project topic RIGHT TO ALIENATION OF

PROPERTY BY THE ACT OF PARTIES under the guidance of my faculty of PROPERTY
LAW, Assistant Professor Dr. Radheyshyam Prasad. I am very grateful to him for his exemplary
guidance. I would like to enlighten my readers regarding this topic and I hope I have tried my
best to pave the way for bringing more luminosity to this topic. I also want to thank all of my
friends , without whose co operation this project was not possible. Apart from all these, I want to
give special thanks to the librarian of my university who made every relevant materials regarding
to my topic available to me at the time of my busy research work and gave me assistance. And at
last I am very much obliged to the God who provided me the potential for the rigorous research
work.
At finally yet importantly I would like to thank my parents for the financial support.

Thank you

TRIVENDRA KUMAR SINGH

Table of contents

1. INTRODUCTION ..1
2. MEANING OF ALIENATION...2
3. MODES OF ALIENATION OF PROPERTY.2
a. Sale...3
b. Mortgage..5
c. Lease.7
d. Exchange..8
e. Gift...9
f. Charge.11
4. CONCLUSION ..12
5. BIBLIOGRAPHY13

Introduction:
Ownership of the property carries with it certain basic rights, such as a right to have the title to
the property, a right to possess and enjoy it to the exclusion of everyone else, and a right to
alienate it without being dictated to, save in accordance with a provision of law. An absolute

right to dispose of the property indicates that the owner can sell it for consideration or can donate
it for religious or charitable purposes he may gift it to anyone, mortgage it or put it up for lease.
Save with the help of law, no other person can interfere with this power or right of the owner or
dictate to him, what should be the manner of alienation, should he alienate or not, or even what
kind of use it should be put to. In short, this right of alienation, that is one of the basic rights of
the owner, cannot be unreasonably encroached upon by anyone through a private agreement.
This general rule is applicable despite there being an express contract to the contrary, and
prevents the transferor from controlling the power of alienation of the transferee once the interest
in the property is transferred.
The extent to which a person transferring real or personal property may limit its subsequent
disposition by the transferee has for centuries been a problem troubling the courts. Restrictions
upon the grantees right to transfer the property, at any time, to whomsoever he may choose, and
in whatever manner he may select, are called restraints on alienation.
Recent developments in the field of real property security law have rekindled an interest -in one
of the most ancient and important battlegrounds of the law-the extent to which the law should
protect free alienability of real property and strike down attempts to restrict or penalize an
owners ability to transfer his property. The context in which the present-day struggle arises is a
far cry from the feudalistic society existing in England when the restraints on alienation doctrine
was developed, yet the materials which follow evidence quite clearly that the judicial role in
articulating and enforcing the doctrine is beginning anew.

MEANING OF ALIENATION

In property law, alienation is the capacity for a piece of property or a property right to be sold or
otherwise transferred from one party to another. Although property is generally deemed to be
alienable, it may be subject to restraints on alienation. In England under the feudal system, land
was generally transferred by subinfeudation and alienation required licence from the overlord.

MODES OF ALIENATION OF PROPERTY

There are different modes by virtue of which immovable property can be alienated. Property can
be transferred by different modes or ways viz. Sale, mortgage, lease, gift, exchange etc. Transfer
of immovable property by each of the aforesaid modes has its own significance, advantages and
disadvantages.

Section 54 of the transfer of Property Act (IV of 1982) defines sale as under : "Sale" is a transfer
of ownership in exchange for a price paid or promised or part-paid and part-promised.
Sale How Made
Such transfer, in the case of tangible immovable property of the value of one hundred rupees and
upwards, or in the case of a reversion or other intangible thing, can be made only by a registered
instrument. In the case of tangible immovable property of a value less than one hundred rupees,
such transfer may be made either by a registered instrument or by delivery of the property.
Delivery of tangible immovable property takes place when the seller places the buyer, or such
person as he directs, in possession of the property.
Contract for Sale
A contract for the sale of immovable property is a contract that a sale of such property shall take
place on terms settled between the parties. It does not, of itself, create any interest in or charge on
such property.
The essential elements of a sale are:

Parties to a sale;
Subjectmatter of sale;
Price or consideration;
Mode of execution of sale

Subject Matter Of A Sale

Section 54 only governs the sale of immovable property. Immovable property can be tangible or
intangible. Tangible property is one that can be touched, such as a house, a tree etc., while
intangible property refers to property that cannot be touched such as a right of fishery, a right of
way etc. The property must be properly and sufficiently identified. In a suit for declaration of
title of the property, the controversy was with respect to the identity of the property.1 There was a
mistake in the plot number. The court held that as both boundaries and plot number were given in
the sale certificate a mistake in the plot number must be treated as a misdescription which did not
affect the identity of the property sold. Rather, it is intrinsic evidence in proving that seller
wanted to convey the right and title in the suit property to the buyer. If there is no sale, there is
no need for an agreement to be executed to that effect on the stamp papers In Rail Vihar Kalyan
Sahkari Awas Samiti v. State of Uttar Pradesh 2, a cooperative group housing society and its
members filed a writ against additional chief-executive officer, Noida, by which the Noida
directed the individual members to execute a tripartite agreement with the welfare societies/cooperative society as lessee and NOIDA as lessor for sale of superstructure and sublease deed for
respective flats, apartments, residential accommodation allotted by the society to its individual
members and restraining them from charging stamp duty on execution of tripartite-deed. Noida
had issued a notice to flat owners to execute the-deed through their respective bodies by a
specific date, failing which, the flat owners were to be declared unauthorized occupants, on
whom penalty was to be charged. While allowing the writ petition filed by the flat owners, the
1 Ram Jiwan Rai v. Deoki Nandan Rai, AIR 2005 Pat 23.
2 AIR 2005 All 86.

court held that the societies do not have corpus and the entire consideration for lease was paid by
the contributions received from the members. They constructed these flats/apartments under the
self-finance arrangement in which the amount was paid by allottee member in installments.
There was no sale of land or superstructure in their favour and thus, the direction to execute a
tripartite transfer deed which includes sale of superstructure and the payment of stamp duty on
the said document, was grossly arbitrary and violative of Art 14 of the Constitution.

Conditions of a Valid Sale Section 54 lays down a specific method for the execution of a sale
deed with respect to immovable property and completion of sale. Generally speaking, in a sale,
the three requirements of law are that transfer of property by sale must take place with the help
of a validly executed sale deed, by the transferor in writing, is properly attested, and
registered.46 Unless, the all three conditions are complied
with, no right passes from the seller to the buyer or in other words, there can be no sale.
However, in case where the property is of nominal value, the sale of property can be completed
by a simple delivery of possession of such property. In such cases, due to the small value of
property, the formality of writing, attestation and registration is dispensed away with, but this
does not mean, that immovable property whose value is less than Rs. 100 cannot be transferred
by adhering to above mentioned these three requirements. It is only that writing, attestation and
registration in such cases is optional.3 The test is the value of the property and nor the amount of
consideration or the price. The above-mentioned requirements of executing a formal sale deed so
as to confer a valid title in favour of the transferee are not applicable in case of sale of property at
a court auction and a certificate of sale issued by the court is enough as the purchasers document
of title. The rules specified under section 54 govern the transfer of immovable property only by
sale and not movable property.4

3 Arjuna Reddy v. Arjuna C Thanga, (2006) 7 SCC 756

4 Saheb Ram Surajmal v. Purushottam Lal, AIR 1950 Nag 89.

MORTGAGE
Justice Mahmood in Gopal v. Parsotam 5 has defined mortgage as under : Mortgage as
understood in this country cannot be defined better than by the definition adopted by the
Legislature in section 58 of the Transfer of property Act (IV of l882). That definition has not in
anyway altered the law, but, on the contrary, has only formulated in clear language the notions of
mortgage as understood by all the writers of textbooks on Indian mortgages. Every word of the
definition is borne out by the decisions of Indian Courts of Justice. The definition of simple
mortgage seems to be taken from Macphersons Law of Mortgages. 6 It is almost the same as the
classic definition given by MR Lindley, in Santley v Wilde: A mortgage is a conveyance of land
or an assignment of chattels as a security for the payment of a debt or the discharge of some
other obligation for which it is given. The Supreme Court in KedarLal v. Hari Lal, 7 has observed
that the whole law of mortgage in India, including the law of contribution arising out of a
transaction of mortgage, is now statutory and is embodied in the Transfer of Property Act read
with the Code of Civil Procedure. The court cannot travel beyond these statutory provisions.
Section 58(a) defines mortgage as under : "Mortgage is the transfer of an interest in specific
immovable property for the purpose of Securing payment advanced or to be advanced by way of
loan, an existing or future debt or the performance of an engagement which may give rise to a.
pecuniary liability". Mortgage as defined in this section is transfer of an interest in some
immovable property. It is not transfer of all the interests but only of some interest in the property.
The purpose of this transfer of interest is to give security for repayment of loan. Therefore, where
a person mortgages his property, the legal effect is that there is a transfer of an interest of that
property in consideration of money advanced to him by the money-lender. The person who takes
loan under a mortgage i.e: transfers the interest in his immovable property, is called mortgagor.
The person in whose favour, the property is mortgaged i.e. who advances loan, is called
mortgage. The sum of money and the instrument or deed of transfer is called mortgage-deed.
5 (1883) ILR 5 All 121, p. 157
6 6th edn, p. 10; Nabin v. Raj Commar (1905) 9 Cal WN 1001
7 AIR 1952 SC, p. 50, 1952 SCR 179

Ingredients of a valid Mortgage

The following are the essential ingredients or elements which are necessary in a mortgage :
There must be transfer of a interest.
The interest transferred must be of some specific immovable property.
The purpose of transfer of interest must be to secure payment of any debt or, performance of an
engagement which may give rise to a pecuniary liability.
Transfer of Interest
In a mortgage there is transfer of only an interest of the immovable property. There is notransfer of absolute interest or ownership. The interest is transferred in favour of the mortgagee
who advances the money as loan. It is the interest of property which gives him (mortgagee) the
right to recover his money from mortgagor's property. A peculiar feature of the interest
transferred is that such interest itself is an immovable property. However, mortgage is not a
transfer of all the interests. After transferring this interest in favour of mortgage, there still
remains a vested remainder with the mortgagor.8

Immovable Property to be specific:

The property which is being mortgaged must be specific immovable property. The immovable
property must be specifically mentioned in the deed. In other words, the immovable property
should be mentioned with certainty so that it can be identified as to which property has been
mortgaged. The property must not be described in general terms.
The consideration of Mortgage should be the Purpose of Mortgage:
The last essential element of mortgage is its oven purpose. The purpose of mortgage must be to
secure a debt. Mortgage is a transfer of property supported with some consideration; the

8 Ali Hussain v. Nilla Kanden, (1864) 1 Mad. H.c. 356.

consideration of mortgage is to secure a debt. Mortgagor transfers the interest in his property to
mortgagee in consideration of security for payment of some kind of loan taken by him.
LEASE
Section 105 of the transfer of property Act defines lease. Lease is a transfer of right of
enjoyment of an immovable property made for a certain period, in consideration of a price paid
or promised to be paid or, money, share of crops, service or any other thing of value to be given
periodically or on specified occasions to the transferor by transferee. As is evident from the
definition, lease is not a transfer of ownership in property; it is transfer of an interest in an
immovable property. The interest is the right to use or enjoy the immovable property. Since
'interest' in an immovableproperty is considered as property, therefore, lease is a transfer of
property. However, lease is a transfer of only a partial interest; it is not a transfer of absolute
interest. Lease, contemplates separation of right of possession from the ownership. The interest
which is transferred is the right of property for a fixed period on payment of some consideration
in cash or kind. The transferor is called lessor and the transferee is called lessee. In common
language the lessor is usually called landlord and the lessee is known as tenant. Price is called
premium and the money, share, service or other things so given is called the rent.
Essential Ingredients of Lease
The following are ingredients essential of lease
The parties i.e. transferor (also known as less or) and the transferee (also known of lessee).
The demise i.e. right to enjoy immovable property
The term i.e. the duration
The consideration i.e. premium or rent the lessor, who transfers the right of enjoyment of his
property must be a person competent to contract and must also have right to transfer the
possession of property. The lessor must have attained the age of majority and must possess a
sound mind at the time of granting the lease. The lessor must not be only competent to contract
but he must have also the authority to effect lease. Lessor has authority if he is either owner of
the property or, has possession of the property. Minor cannot grant lease; lease executed by

minor is void. Minor's guardian of property is authorized to grant 9 lease without Court's
permission for a term not exceeding five years or ensuring for more than one year after minor's
attaining majority.158 Lessee too must be competent to contract at the date of execution. Lessee
must be of the age of majority and must be of sound mind. Lease in favour of a minor is void
because the transfer by way of lease contemplates agreement by minor to pay rent and other
obligations. Lessee may be a juristic person e.g. a company or, a registered firm. But, an
unregistered firm is not juristic person. Therefore it cannot be a competent lessee. Lease is a
transfer of right of enjoyment in an immovable property. It is not a transfer of ownership; it is
transfer of partial interest. Ownership or absolute interest is transferred. In mortgage only partial
or limited interest is transferred for securing a debt. In a lease too partial or limited interest
namely, the right of enjoyment of immovable property, is transferred. Lease is, therefore, transfer
of limited estate. This limited estate which is right of enjoyment' of property, is called demise. In
a lease this right of enjoyment or demise is the subject matter transfer. The essential
characteristic of a lease as that the subject (property) is occupied and enjoyed and the corpus of
which does not, by reason of the user, disappear.10 The right of enjoyment must be given to the
lessee for a certain period of time. The period for which the right to use the property is
transferred is called 'term' of the lease.
Creation of Leases
Section 107 of the transfer of Property Act provides for the modes of making leases. There are certain
formalities which are necessary for completing a lease. This section provides for two modes of creation of
leases. Leases which can be made only by registered deed
Leases from year to year
. Leases for a term exceeding one year
. Leases reserving a yearly rent
Permanent leases
9 AIR (1975) Mad. 282.
10 Girdhari Singh v. Magh Lal Pandey, (1918) 45 Cal 87; 42 IC 651

 Leases in which registration is optional: (a) Leases from month to month. (b) Leases for a term of one
year. (c) Leases for a term of less than one year. The Indian Registration Act, 1908 also makes similar
provisions regarding the registration of leases. Under Section 17, the leases mentioned in group (A) are
compulsorily registerable. The leases grouped in (B) may be made either by registered instrument or by
delivery of possession.

EXCHANGE
Section 118 defines Exchange as under
When two persons mutually transfer the ownership of one thing for the ownership of another,
neither thing or both things being money only, the transaction is called an exchange. A
transfer of property in completion of an exchange can be made only in manner provided for the
transfer of such property by sale. When two persons mutually transfer the ownership of one thing
for the ownership of another11 neither thing or both things being money only, the transaction is
called an 'exchange.' It is a transaction by which each party acquires property in which he had no
Interest before. For a valid exchange, there must be a physical delivery of the property to the
parties and each party to the exchange has the rights and is subject to the liability of the seller as
to that which he gives, and also has the rights and liabilities of a buyer as to that which he
takes.12
Essential Requisites of an Exchange:
There must be a minimum of two parties and two properties, one each belonging to each of
them;
There have to be a mutual transfer of these properties i.e., A transferring his property to B, and
B in turn transferring his property to A
Property can be exchanged with either movable or immovable property;
11 Kama Sabu v. Krishna Sahu, AIR 1954 Ori 105.
12 Mohammadin v. Asibun Nissa, AIR 2005 Jhar 1.

 No other consideration should be involved besides these properties. An exchange involves a

mutual transfer between two parties of their respective properties. The main factor that
distinguishes an exchange from a sale is that in an exchange, no monetary consideration is
involved. Exchange of one property for money is a sale, and an exchange of movable property
with another movable property is barter.
Exchange Must be Mutual : The term mutually signifies that the parties must be same,165
and two things are exchanged. For Example, Y transfers his property to Z and Z transfers his own
propcity in exchange to Y. If the transfer is only from the side of one of the parties, it is not an
exchange. Thus a transfer by a husband to a wife in discharge of her claim to maintenance is not
an exchange as the wife does not transfer ownership in anything.166 Similarly, a document
whereby one decree is set off against another and the balance made up by a transfer of land is not
an exchange, for there is no mutual transfer of two things.13

GIFT
Section 122 of the Transfer of Property Act defines "Gift" as under :
"Gift" is the transfer of certain existing morable or immovable property made voluntarily and
without consideration, by one person, called the donor, to another, called the donee, and accepted
by or on behalf of the donee.
Acceptance when to be made
Such acceptance may be made during the lifetime of the donor and while he is still capable of
giving. If the donee dies before acceptance, the gift is void. Therefore, from the perusal of the
aforementioned definition of gift, as per section 122, the following condition should be satisfied
for a valid "Gift" : Gift is transfer of ownership without consideration. Gift must be made of
existing movable or immovable property capable of being transferred. Therefore, the share of the
coparcener property jointly hold by the coparceners cannot be transpired unless the share has
been obtained after the partition of the said joint family coparcenery property as in that case the
13 Dina Nath v. Matimala, (1906) 11 Cal WN 342.

interest of the coparceners would be fluctuating. Meaning thereby, the property obtained after
partition of the Joint Family property can only be gifted. Similarly, a gift of the property obtained
after a preliminary decree of partition is passed by the court is valid. "Gift" is valid only when
the transfer of property is voluntarily and without consideration on the part of the donor.
Voluntarily means that the transfer should be free and should not be obtained by force, fraud or
undue influence. The offer to make the gift must be voluntary. A gift should be executed with
free consent of the donor which

REVOCATION OR SUSPENSION OF GIFTS

According to section 126 of the transfer of Property Act, a gift may be suspended or revoked.
Section 126 further provides for two modes of revocation of gift which are as under :
Revocation of gift by mutual consent of the donor and the donee
Revocation by rescission as in the case of contracts
Prima Facie gift is a contract between both the parties and is they agree that it would be revoked
on the happening of an event, the gift will be revoked on the happening of such an event.
Similarly, since gift is voluntary transfer of ownership of property in favour of donee by the
donor, therefore, if it could be proved that the gift was not made voluntarily by the donor, then
the gift must be revoked. Gift is always preceded by an express implied contract i.e. offer by the
donor and acceptance by the donee. Therefore, if the preceding contract itself is rescinded then
there is no question of taking place of gift under it.

Charge :
Where immovable property of one person is by act of parties or by operation of law made
security for the payment of money to another, and the transaction does not amount to a mortgage,
the latter person is said to have a charge on the property; and all the provisions hereinbefore
contained which apply to a simple mortgage shall, so far as may be, apply to such charge.
Nothing in this section applies to the charge of a trustee on the trust-property for expenses
properly incurred in the execution of his trust, and. save as otherwise expressly provided by any

law for the time being in force, no charge shall be enforced against any property in the hands of a
person to whom such property has been transferred for consideration and without notice of the
charge.
Essential Requirements for Charge :
The following are the essential requirements of a charge :
Immovable property of one person is made security for
the payment of money to another; By act of parties or by operation of law
This transaction does not amount to a mortgage;
All the provisions which apply to a simple mortgage
shall, so far as may be, apply to such charge; and Charges cannot be enforced against any
property in
hands of a bonafide transferee for consideration without its notice.
How the Charge is Created
A charge need not be in writing,14 but if it is reduced to writing, registration of the same is
necessary in the case of a non-testamentary instrument of the value of Rs 100 or upwards.No
particular words or form is prescribed to create a charge. However, the intention of the parties,
that money is to be paid out of a specific property, must be very clear. For example , the husband
carmarks a specific property for the wife so that she can realise her maintenance from that
property. It does not amount to the transfer of an interest in the property in favour of the wife, but
it is a charge, as the payment is to he made out of that property. An assignment of such a charge
would also need to be registered.15 Electricity dues of an erstwhile consumer is not a charge on
the property and cannot be recovered from the purchaser of the property. A charge cannot
ordinarily be split up by apportioning liability amongst various persons. The following are the
14 Abduljabhar v. Venkata Sastri, AIR 1969 SC 1147.
15 Shiva Rao v. Official Liquidator, AIR 1940 Mad. 140

examples of creation of a charge: A document that gives only a right of payment out of a
particular fund of property; An agreement which gives immovable property as security for the
satisfaction of a debt; A compromise under which the right is given to the other party for the
payment of a maintenance allowance in property without transferring an interest in the property;
An agreement by which an owner of a share in a village receives in lieu of his share a lump sum
out of the income; An agreement executed by a person forbidden to execute a mortgage taking
an advance on the same terms as a mortgage; An undertaking not to sell a particular share in the
factory till the loan on promissory note is paid off; A covenant in a lease empowering the
lessee to retain part of the rent in satisfaction of a previous loan to the lessor; A provision in a
partition deed that a common family debt should be proportionately discharge by the respective
sharers and that if any sharer defaults, the share of defaulting sharer constitutes a charge in
favour of the sharer who has paid in excess. A charge to secure a liability which is not in
existence but is contingent and is liable to arise in future is valid. A charge cannot be created on
a future contingency146 though it is not necessary that there should be any pre-existing debt and
a charge may be created for discharge of an indemnity or contingent liability.A charge holder in
whose favour a charge is created on the property that is to come into existence in future will be
entitled to priority over a person who attaches the property after that such charge comes into
existence.
CONCLUSION
According to section 54 of the TP Act, Sale is a transfer of ownership in exchange for a price
paid or promised or part-paid and part-promised. In a sale, there is an absolute transfer of all
rights in the property sold.
Section 58 of TP Act defines a mortgage as the transfer of an interest in a specific immovable
property for the purpose of securing the payment of money advanced or to be advanced by way
of loan, an existing or future debt or the performance of an engagement which may give rise to a
pecuniary liability. Thus, a mortgage is a transfer of an interest in specific immovable property as
security for the repayment of a debt.

The transferor is called mortgagor, the transferee a mortgagee; the principal money and interest
of which payment is secured for the time being are called the mortgage-money, and the
instrument (if any) by which the transfer is effected is called a mortgage-deed.
Section 118 of the TP Act provides that when two persons mutually transfer the ownership of one
thing for the ownership of another, neither thing nor both things being money only, the
transaction is called an Exchange. The definition of the word exchange is not limited to
immovable property. Exchange is not only exchange of lands but also barter of goods. A
transaction of exchange presupposes existence of different properties owned by different
persons, that as a result of the transaction of exchange both the properties continue to be owned
by two different parties but the ownership of one property is transferred to the owner of the other
and vice versa.
Section 122 of the TP Act defines Gift as the transfer of certain existing movable or immovable
property made voluntarily and without consideration by one person, called the donor, to another,
called the donee, and accepted by or on behalf of the donee. Such acceptance must be made
during the lifetime of the donor and while he is still capable of giving. If the donee dies before
acceptance, the gift is void. A gift of immovable property to a minor is complete when it is
accepted by a person on behalf of the minor and appends his thumb impression on the gift-deed
in token of acceptance.
Section 105 of the TP Act lays down that a lease of immovable property is a transfer of a right to
enjoy such property, made for a certain time, express or implied, or in perpetuity, in
consideration of a price paid or promised, or of money, a share of crops, service or any other
thing of value, to be rendered periodically or on specified occasions to the transferor by the
transferee, who accepts the transfer on such terms. The transferor is called the lessor, the
transferee, is called the lessee, the price is called the premium, and the money, share, service or
other thing to be so rendered is called the rent.
Therefore for a property to be transferable several conditions need to be satisfied. These include
that of constituting a transfer; it to come within the definition of an immoveable property and it
should not be amongst those items, which may not be transferred under Section 6 of the Transfer
of Property Act. In addition to this it is clear that there are several kinds of transfer that may take

place. Each kind of transfer as has been explained has different procedures and conditions, which
need to be satisfied. These are hence the various elements that are required to be transferred for a
property to be transferable.

Bibliography
Bare Act:
Universals, Transfer of Property Act, 1882.
Law Reporters:

All India Reporter

Supreme Court Cases

Books:
Dr.PoonamPradhanSaxena, Property Law, (Lexis Nexis, 2nd Edition, 2011)